2016-11-16 11:22:40

Although at the Asian session the USD was undergoing correction, at the beginning of the European session the USD has been growing. However, it seems that the USD has slowed down the rapid rise in the foreign exchange market, which took place after the election of Donald Trump as President of the United States. Dumping of the US government bonds has temporarily suspended. Situation in the US bond market is settling down.

On Monday, the yield on 10-year US bonds amounted to 2.3%, against the highs since 30 December due to expectation of expansion of the budget expenditures in the USA.

On Tuesday, the US Commerce Department issued the data showing that adjustment for seasonal variations retail sales in October have increased by 0.8%. According to revised data retail sales in September have increased by 1%, not 0.6% as previously reported. In the past two months, retail sales have been demonstrating the highest growth for at least two years.

Import prices in October have grown by 0.5% against the previous month and the forecast of +0.3%). Import prices have been growing for seven out eight months, which is a sign of inflation growth. And this fact can be used as a good ground for the interest rate increase in the country in December.

Now market participants will gradually switch attention to the Fed’s meeting, scheduled for 13-14 December, and interest rate decision, which will be made at the meeting. According to futures for the Fed rate, probability of monetary policy tightening in December is 85% -90%.

At the beginning of the European session, the pair USD/CHF is traded at the level of 1.0020, which is by 20 points higher than psychological level of 1.0000.

The rise in the pair is beneficial for the SNB, which keeps saying about the possibility of intervention in the currency market. Traditionally, the SNB considers that the franc is overbought.

In September the Swiss National Bank left deposit rate unchanged at the level of 0.75%. The range for 3- month LIBOR rate was also left unchanged at -0.25% to -1.25%. The SNB said that the negative interest rate and readiness of the Central Bank to intervene into the currency market would bring down the price of the franc and decrease its attractiveness, easing pressure on the Swiss national currency. Next meeting of the SNB will be held on December 15, immediately after the two-day meeting of the US Fed on 13-14 December.

Today at 13:00 (GMT+3) - ZEW economic expectations index in Switzerland for November Сwill be released. This index estimates business environment, labor market and other components of the national economy. Previous index was at the level of 5.2.

At 17:15 - US industrial production and capacity utilization for October will become known.USD/CHF: The USD continues to rise at the European session.  Fundamental analysis for 16/11/2016